By Reshma Kapadia

Yet another investment bank has weighed in with a touch of optimism about India. Yesterday, it was Goldman Sachs. Today, Citibank strategist Aditya Narain tells clients that 2013 will be a “noisy” year for India amid expectations for reforms and an economic rebound, as well as impending elections but he still expects India’s Sensex to rise 10% to 20,800. That’s half the gain so far this year–(yes, somehow the Indian market logged pretty good returns despite the glum) but is still higher.

“We see upsides in macro drivers: lower interest rates and inflation, easier liquidity and government intent – all tailwinds for the market. Headwinds lie with the economy: corporate risk appetite, investment cycle and demand – will all likely be sluggish. This macro push should be able to override the economic push-back; by about 10%,” he writes.

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